R2010-143 - 2010-10-25rr. M
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WHEREAS, the City of Pearland, Texas ("City") is a regulatory authority under
the Public (Utility Regulatory Act "'PURA and' pursuant to 33.0001, the City has
exclusive original jurisdiction over the electric rates, operations, and services provided
within city limits; and
WHEREAS, the City has the authority under PIURA 33.001 and 36.001, to
determine whether the existing rates of an electric utility are unreasonable or in any way
a violation of any provision of law and
WHEREAS„ on or about June 30, 2010, CenterPoint Energy Houston Electric,
l_LC (CenterPoint) filed with the City Secretary an application for authority to change
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33.001 and 36.001, filed with the City of Pearland a Statement of Intent to change
delivery rates in all municipalities exercising original jurisdiction within its service area
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WHEREAS, the City previously authorized participation with the Texas Coast
Utilities Coalition ("TCC in hiring experts and legal counsel to review CnterPoint's
Statement of Intent, and
WHEREAS, the City suspended the effective date of the Company's requested
rate change; and
WHEREAS, TCUC representatives obtained additional ilnformation from the
Company through written requests for information; and
WHEREAS, the City's consultants and representatives through cooperative
efforts under the direction of TCUC have reviewed the rate filing package and
responses to information and have made a recommendation to the City regarding the
rates to be charged by the Company within the City; and
WHEREAS, on October 25, 2010, this Resolution was properly noticed and the
Company and any interested citizen was given an opportunity to address the City
Council regarding the Company's current rates and it's Statement of Intent to increase
rates; and
WHEREAS, ''URA 36.151(x) provides that if a regulatory authority, on its own
motion or on complaint by an affected person, after reasonable notice and hearing, finds
that the existing rates of an electric utility for a service are unreasonable or in violation
of llaw, the regulatory authority shall enter an order establishing the just and reasonable
rates to be observed thereafter, and serve a copy of the order on the electric utility; and
WHEREAS, PURA 36.1511(b) provides that the rates thus ordered by the
regulatory authority constitute the legal rates of the electric utility until changed as
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WHEREAS, after affording reasonable notice and hearing to the Company, it is
the City's opinion that the Company's rates are not reasonable, and
City has made a determination of the reasonableness of the existing rates of the
Company, and has determined just and reasonable rates to be hereafter observed and
enforced for all services of the Company within the City; now, therefore,
Section 1. That the Company was given reasonable notice of the Council's
meeting at which the Company's, rate application was considered, and the Company
had a reasonable opportunity to show the City that its rates were just and reasonable.
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Section 2. That the Company failed to show that it's proposed or existing rates
are just and reasonable.
Section 3. That the adjustments to the Company's Statement of Intent
proposed by Diversified Utilities Consulting, Inc., and Mr. Jacob Pous on behalf of
TCUC and the overall coordinated recommendation of the cities submitted in Public
Utility Commission of Texas ("PUC") Docket No. 38339, and provided to the Company
on September 10, 2010, are reasonable and that it is, therefore, reasonable to reduce
the Company's proposed increase of approximately $110.8 million in its annual
revenue, by $259.8 million, which represents a reduction to its current revenue of about
$149.1 million comprised of a reduction of approximately $114 million for retail
distribution rates, and approximately $35 million for wholesale transmission rates from
the level of CenterPoint's existing annual revenue.
Section 4. That within ten days of the adoption of this Resolution, CenterPoint
shall file with the City rate tariffs consistent with the adjustments proposed by Mr. Pous
and the other cities' experts who coordinated with TCUC, and the costs allocation and
rate design recommendations proposed by the cities' experts in PUC Docket No. 38339,
and provided to the Company on September 10, 2010, that will result in a reduction in
current annual revenue of $149 million. Included in this recommendation, but not
limited by it, is the requirement that franchise fees be recovered from all customers in
base rates, denial of the Company's Storm Hardening Rider as an unauthorized
automatic recovery mechanism, and denial of the Company's alternative customer
charge.
Such tariffs shall constitute just and reasonable rates and establish the
Company's overall revenues at an amount that will permit the Company a reasonable
opportunity to earn a reasonable return on its invested capital used and useful in
providing services to the public in excess of the Company's reasonable and necessary
operating expenses, in compliance with PURR 36.151.
Section 5. That the Company shall upon the effective date of this Resolution
begin charging rates set forth in the Tariffs that are consistent with the recommendation
of TCUC and the witnesses it coordinated with in PUC Docket No. 38339.
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Section 6. That the existing rates, services charges, and tariff language not
inconsistent with the recommendations of TCUC and the witnesses it coordinated with
in PLIC Docket No. 38339 shall remain operative,
Section 7. That within thirty days of the adoption of this Resolution, the
Company shall reimburse TCUC for all ratemaking costs associated with TCLIC's
activities related to the rate proceeding andl thereafter make prompt reimbursement on a
monthly basis to cover costs of appeals to the PUC or Courts, in accordance with PURA
33.023.
Section 8. That a copy of this Resolution shall be sent to Stephen Bezecny,
Director, Regulatory Relations, CenterPoint Energy, Inc. 111 Louisiana St., Houston,
Texas, 77002 and Alfred R. Herrera, at Herrera and Boyle, PLLC, 816 Congress
Avenue, Suite 1250, Austin, Texas 78701.
Section 9. That the City is authorized to intervene in any appeal of the City's
action filed at the PUC and to otherwise participate in any litigation associated with the
Company's rates charges in the City, in conjunction with TCUC.
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TOM REID
MAYOR
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